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Las Vegas -- A glimpse behind the hoopla generated by the
"Big Four" broadcast networks last week about their digital-TV plans shows
technical hurdles at almost every juncture of the signal path.

Beyond the four varying strategies chosen by ABC, NBC, CBS
and Fox related to digital-video format is a long list of technical questions concerning
tower height, how to configure higher-power transmitters and how to "upconvert"
pre-existing analog content into a digital format.

"To some extent, [the selection of different display
formats] is bad news," said Mark Richer, vice president and general manager of
Alexandria, Va.-based Comark Digital Services, which makes broadcast-transmission
equipment. "Multiple standards will make things far more difficult for you and your
engineering staffs."

The good news, he said, is that the marketplace will be
tested: Both broadcasters and consumer-electronics firms that market digital TVs will find
out this fall what consumers want and what receivers can do.

On the display side, several large consumer-electronics
vendors at the National Association of Broadcasters show here showed or discussed their
progress on early model digital-TV sets, which go into production shortly. However, few
are including "fire wire" or baseband connectors on the back that enable a
method of passing cable-delivered digital-broadcast pictures securely to the TV.

To accommodate cable carriage, some, like Panasonic
Consumer Electronics,said they will sell with their early model digital
sets an additional set-top, which allows them to meet market demand while remaining
somewhat flexible to the market as it evolves.

Nevertheless, the digital glitz was pervasive here. During
the weeklong conference, more than 100,000 attendees schlepped back and forth between the
Las Vegas Convention Center and the Sands Convention Center just to see all of the options
facing them.

Broadcast-industry officials were acutely aware of the
galloping weight of the issues that they must resolve, but they remained enthusiastic that
the switch to digital is critical to their future.

"The digital switch is a puzzle with many different
pieces that we're trying to put together," said Chuck Sherman, senior vice president
of television at the NAB. "It involves technical, legal, business and programming
issues, [which] all have to come together at the same time."

The prevailing hope seemed to rest not just in the extra 6
megahertz given to broadcasters by the Federal Communications Commission for the digital
conversion, but in the stipulated 19.2-megabit-per-second data rate that the extra channel
affords them.

Some vendors with products that straddle both the cable and
broadcast industries said the fervor of the digitally charged NAB show reminded them of
cable shows circa 1995.

"In some ways, [broadcasters] are where cable was
three or four years ago in their excitement to go digital," said Paul Harr, marketing
manager for Scientific-Atlanta Inc.'s Broadcast Television Networks division.

"On the other hand, [broadcasters] are also kind of
nervous, because they don't see the business case -- cable sees more channels with
digital, but broadcasters aren't sure whether or not multichannel video will fragment
their audience," Harr added.

On the technology side, this year's NAB show was rich with
the kind of beyond-prototype digital products that are necessary for a looming FCC
deadline of mid-1999 to get digital broadcasts operational.

For studios, several vendors introduced high-definition and
standard-definition TV encoders, including DiviCom Inc., which partnered with JVC Co. of
America, Lucent Technologies and S-A, among others.

S-A, with partner Cogent Technology, also debuted a
"bit splicer," which is necessary to insert local programs or advertisements
into a digital-video stream before it is delivered to viewers. Without it, broadcasters
would have to decompress and convert to analog the digitally compressed video streams that
they receive; insert the new material; then re-digitize and re-compress it, S-A executives

The computer industry was also all over this year's NAB
show, as the concept of convergence begins to occur all over again -- but this time
between computing giants and cable and broadcast players.

Intel Corp. agreed to assist the Public Broadcasting
Service in creating documentary and educational programming that is augmented with
"complementary material" via Intel's Intercast technology, which allows the
transmission of data with a TV broadcast.

And Microsoft Corp. said it will include Intel's Intercast
technology with its Windows 98 operating system. The deal is aimed at giving personal
computer-users access to more Internet-based TV programming.

Intel's programming partners include MTV: Music Television,
NBC and PBS. Microsoft will now highlight their listings in a guide that will be part of
"WebTV for Windows" in Windows 98.

Microsoft agreed to collaborate with Sony Electronics Inc.
through a cross-licensing agreement, where Sony licenses Microsoft's Windows CE operating
system and Microsoft licenses Sony's Home Networking Module. The companies discussed the
deal as a way to "create a convergence of the personal computer and consumer
audio/video electronics platform."

The companies said they will work on three key steps --
production, transmission and reception -- to enable transmission and display of digital

Plus, both companies will support the use of 1080 interlace
(1080I) as "the preferred format" for HDTV production and archiving. While
Microsoft remains committed to its HD-0 plans to support the 480 progressive (480P)
format, executives here said that 1080I for production and archiving is "the
highest-resolution format that is cost-effective and currently available" for that
area of the digital puzzle.

Notably, Microsoft and Sony are also tightly entwined in
Tele-Communications Inc.'s OpenCable set-top plans. Sony took a 5 percent equity stake in
General Instrument Corp. in January as a hook into OpenCable boxes, and TCI stipulated
Windows CE as one of the operating systems that it will use in the GI digital DCT-5000
set-tops that it has on order.